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What are Blockchain Bridges, and why are they necessary?

Blockchain Bridges It is a vital component of the emerging Web3 Internet, as it allows blockchains to transfer assets between each other and is essential for interoperability. Blockchain is blind to the outside world, and they can only see their own blockchain and cryptocurrency smart contracts. Originally, they could not share tokens, NFTs, or data with other blockchains, and had to rely on “oracles” to receive data from the outside world.

Blockchains also have different designs and specializations, making some better at certain tasks than others, and trying to use one blockchain to serve every location will lead to network congestion and unreasonable blockchain transaction fees (“gas”). Interoperability between blockchain networks has been a top priority for years now, as it will allow blockchains of different disciplines to share assets between their respective smart contract systems.

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Related Topics: Why Web3 Is No Longer Secure Enough For Mass Adoption

as such Queen Telegraph He explains that bridging allows the blockchain to transfer cryptocurrencies and NFTs between each other. Bridges are a combination of smart contracts and Web2 scripts designed to lock tokens on one side and make “encapsulated” tokens on the other. Or, on the contrary, to burn encapsulated tokens and release locked tokens. Bridges help offload traffic from crowded blockchains like Ethereum to less congested, more scalable blockchains like Solana. term “cross chain“It is frequently used when discussing applications that use blockchain bridges. Centralized (or”united“) Bridges operated by exclusive institutions and companies have been around for some time and are the most secure, with the BTC encapsulated bridge between the more popular Bitcoin and Ethereum blockchains. On the other hand, decentralized bridges run only on smart contracts and Web2 server scripts, and must rely on high-end cryptography. To prove that the sender on one side is also the receiver on the other side.

Bridges are high priority targets for hackers

Bridges act as escrow accounts between blockchain networks, often relying on a combination of the Web3 blockchain and Web2 Internet infrastructure to send messages between networks. For this reason, blockchain bridges typically have hundreds of millions (if not billions) of digital assets locked inside their smart contracts, making them high-priority targets for hackers. So far, there is no universal standard architecture for blockchain bridges, and many mistakes have been made in trying to figure out the best way to build them. It only takes one small typo before hundreds of millions of dollars worth of assets can be stolen. Thus, blockchain bridges remain at the forefront of the (very sharp) technology.

The most famous bridge hacks include Nomad’s recent $190 million hack, in which a simple typo after a smart contract upgrade allowed everyone to ‘plunder’ the bridge’s assets in a massive frenzy, or the hack of the larger and more famous $600 million Ronin Bridge. He was executed by North Korea’s Lazarus Group in March 2022. Blockchain Analytics Company decomposition It shows that blockchain bridge hacks account for nearly $2 billion in stolen assets, and states that effective bridge design still remains.”Unresolved technical challenge.“Fortunately, many venture capital firms are willing to compensate the victims of bridge hacks, as the future economic potential of blockchain bridges outweighs their early losses.

Blockchain bridges are a vital component of the emerging economic layer Web3 of the Internet, as they allow blockchains of different disciplines to transfer assets between each other. Bridges are high-priority targets for hackers, owing billions in losses to many high-profile bridge hacks. Because bridges are still very experimental and do not have a modular architecture, they are risky to use and should not be trusted with large amounts of value without some kind of insurance in the event of a breach. but, blockchain bridges It is also a vital component of the future of Web3, and developers will eventually find a secure and standardized way to design and manage it.

source: Queen TelegraphAnd the decomposition

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